Automation and self-service are key drivers of today’s commerce environment and consumers are embracing it in nearly all forms. Consumers have become champions of the grocery store self-service checkout line and have moved their shopping from offline to online, all in the name of independence and control. But, can this movement extend to the mortgage industry? Some are betting it will, and I’m one of them.
The mortgage industry’s early attempts to inject self-service into the transaction were not very effective. Consumer portals, designed to put the borrower in control of the transaction, terrified borrowers.
With not knowing the potential impacts of the decisions they were being asked to make, they froze and made no decisions at all. Consumers want control, but they don’t want the responsibility. Frankly, they don’t know enough about the mortgage process, and they admit it.
Though self-service in the mortgage industry has failed in the past, I do not believe it is indicative of the future. Like many great ideas, the process just needs fine-tuning.
What the consumer really wants is added convenience, not to actually do the process themselves. Often this means that the borrower prefers to deliver information on their timeline rather than the prescribed timeline to close on time.
Of course, this does not work well for anyone unless it happens before the deal enters the loan origination system; when it’s still in the front-end marketing system. That’s when we can afford to let the consumer drive the bus.
As it stands today, loan officers send paperwork to a prospective borrower, ask them to fill it out and send it back. Sometimes they do, and sometimes they don’t. Borrowers often stray at this point because the process is intrusive; they feel like they are being scrutinized and judged based off of answers they provide, and of course, they are. There is no way around the underwriting process, but I believe there are ways can make significant changes that will make the borrower feel more at ease.
What if you had a kind of consumer-facing portal that a loan officer could invite a prospect to participate in? The borrower could go into the tool and fill out whatever information they wanted.
The more they added, the more accurate the product and pricing data would be, the more in-focus the information they needed would become. Now, it’s about the borrower dialing in on the financing they need and not the industry deciding how much we will allow them to have. Well, it is, but it doesn’t seem like it as much.
At Mortech we’ve implemented these consumer-facing tools with our new Connect Plus application. Connect Plus allows any lender to create a mortgage website, or add plug-ins to their existing website to ease the consumer through the online lending process. While still beneficial for the lender, Connect Plus engages the consumer not only through customized online 1003 applications, but by also adding a personalized touch to the online lending process. Whether allowing rate-conscious consumers to search your daily, real-time rates, or improving online personal interaction by allowing online shoppers to browse loan officer bios, or by providing educational resources, Connect Plus lets you turn your lending website into a consumer-facing portal.
It’s a subtle shift, but I think it’s an important one. Instead of the traditional approach where we try to get enough data into the LOS to complete the loan app, it’s more like a conversation with the prospect. It’s communication, which is one of the things most consumers argue that we’re not very good at. It’s not that we can’t do it, it’s just that our business has been data-driven, not customer service-driven. That’s changing as the industry responds to pressure from the new regulator.
Loan officers will be able to provide the best customer experience when the added convenience doesn’t conflict with the work to close the loan. An optimal time to provide the added convenience is before the loan is ever in the pipeline; when it’s still in the marketing system.
We gain the advantages of a happier consumer, one that is already showing some signs of loyalty to us, which grows as they complete more of their profile. We lose nothing, as the consumer cannot slow down the pipeline when he’s not even in it.
So, is this self-service in home finance? Not exactly, but it may be close enough to give the lenders who use it a very powerful competitive advantage.
